5 levers to drive supply chain resilience in the telecom industry

By evaluating and implementing these levers, supply chain leaders have the tools to address disruption and promote resilience.

1. Supply chain planning orchestration across inventory and demand management

Supply chain orchestration involves coordinating and integrating all activities, processes and stakeholders involved in the supply chain, from sourcing raw materials (semiconductors and towers) to delivering finished products (internet and cable services to end customers). It aims to optimize the entire telecom supply chain by synchronizing and streamlining operations to achieve greater efficiency, visibility and responsiveness. This helps telecom companies achieve operational excellence, improve time to market, optimize costs, enhance the customer experience and leverage technology advancements.

Implementing supply chain orchestration — for example, through control towers — can positively impact how telecom companies plan for inventory management and demand fulfillment. By implementing planning optimization techniques for demand forecasting, replenishment planning and stock level optimization, telecom companies can achieve several qualitative and financial benefits.

2. Enabling end-to-end supply chain visibility

Most telecom operators don’t have real-time visibility of the end-to-end value chain and can’t pinpoint supply chain bottlenecks easily. Slow organization responsiveness to changing market dynamics and failure to predict risk leads to further volatility in business operations.

Creating agility through real-time end-to-end supply chain visibility with an ability to simulate different scenarios and predict the impact on business is critical. Some benefits of implementing processes and technologies around end-to-end supply chain visibility include:

• Improved visibility of the current state of the supply chain and risk monitoring
• Rapid and effective crisis response through incident monitoring and reporting
• Improved major event responsiveness with crisis response based on modeled scenarios
• Improved operational excellence
• Reduced cost of goods sold and increased cash release

Supply chain visibility software, including Internet of Things (IoT), radio frequency identification (RFID) and big data analytics, enables end-to-end supply chain visibility.

3. Enabling supplier collaboration, diversity and performance monitoring

Based on a study conducted in March 2023, 63% of global telecommunication companies cited sourcing and logistics-related issues as primary risks to their business operations.¹ Shortage of critical telecom components and semiconductors, due to factors like the war in Ukraine or the US-China trade dispute, is just one of the issues cited. To counter such supply issues and for increased visibility and responsiveness, telecom sourcing organizations should collaborate more strategically with key suppliers by implementing joint planning, early supplier involvement, and continuous process improvement through forecast and order collaboration.

Supplier diversity can also help relieve inflationary pressures, as it introduces more competition across the ranks of suppliers. An EY study conducted in January 2023 suggests that 54% of companies are looking to integrate alternate sources of supply. Continuously monitoring supplier performance can help identify problems before they become significant. Metrics such as delivery times, quality and responsiveness should be tracked and benchmarked to help ensure adequate supplier performance.

Building strong relationships with key strategic suppliers fosters trust, collaboration and mutual benefits. It improves supply chain resilience, reduces costs and enhances the ability to innovate and stay ahead in a competitive business environment.

4. Digital transformation

According to an EY survey, 64% of supply chain executives in the US are planning more significant investments in digital transformation to improve supply chain resilience. Increasing automation and investments in AI and machine learning were among the top methods cited in the survey, with 37% already adopting these technologies and another 36% expecting to do so soon.

AI and machine learning tools can help with predictive maintenance, detecting likely issues in equipment before they occur and giving a longer lead time in ordering parts. The use of connected IoT sensors facilitates monitoring and control of operational assets, such as fleet vehicles and control meters, surfaces opportunities for efficiencies — and in turn, helps enable round-the-clock tracking of goods and vehicles for greater visibility. Adopting these technologies is enabling supply chain leaders’ confidence, with 23% of the leaders expecting to have a digital ecosystem by 2025, up from only 1% in 2021, according to Gartner.²

Using advanced analytics, AI modeling and optimization algorithms, telecom supply chain teams can analyze complex data, evaluate complex scenarios and make data-driven decisions to optimize supply chain networks. This approach will help supply chain teams optimize network design, resource allocation and operational processes, leading to improved customer service, reduced costs, enhanced agility and increased competitiveness in the market.

5. Enterprise asset management

While telecom operators rely on a large and complex network of assets, including towers, cell sites, fiber optic cable and network equipment, they must continue investing in infrastructure to compete with over-the-top and tech players and support customers’ growing demand for data connectivity in the 5G era. According to the GSMA findings, telecom operators are expected to invest over US$1 trillion in their networks globally through 2025.³ To manage these assets, they require advanced asset management capabilities that can provide visibility and promote efficiency.

Such capabilities can help telecom companies efficiently plan end-to-end asset management processes as they work with multiple assets from different vendors. Also, the correct level of insight can help operators establish predictive and prescriptive maintenance plans and avoid unplanned outages of network equipment, which have a detrimental impact on subscribers. In addition, telecom operators need to rethink their asset strategies for reevaluating core and noncore assets.